Midlands woman helps hundreds get refund from debt scam

By Darragh Copley - email

NEESES, SC (WIS) - The largest refund in state history has been recovered for South Carolina consumers.

A credit counseling company out of California scammed more than 350 victims in our state, but thanks to one Neeses woman, the business must pay them back.

"I'm calling to let you know that the department has decided to close your file as satisfied because you're receiving a full refund," went the phone message.
A smile is worth 1,000 words, but for the woman on the other end, it means almost $1,000.

"We're very excited about this refund, especially in the current economic downturn its just something nice to give back," said Carri Grube Lybarker.
Lybarker, an attorney with the state Consumer Affairs Department, filed suit against a California credit counseling company and won.

"We love situations like this where we have one consumer filed a complaint against the business and 360 other consumers are going to be getting their money back as well," said Lybarker.
The business now must refund almost $900,000 to more than 350 victims.

"You can call it a scam, misleading, exploitation whatever, but its just unlicensed, they are not complying with South Carolina law."

Here's how it worked: say you are $10,000 dollars in debt. Freedom Financial would offer $6,000 to your creditors to settle your debt, and since they are saving you $4,000, they charge you a four percent savings fee, which is $160. First you must pay a 12 percent negotiating fee, which is $1,200, then let's say it takes you four years to pay off the $6,000. Each month the company will charge $25, so that's another $1,200. So in reality, you're paying more than $8,000 in fees to get rid of your $10,000 debt.

Though there are reliable and reputable credit counseling services, Lybarker says to look for the red flags.

"Promises when people are promising to settle your debt, or save your home or repair your credit or they make guarantees," she said.

If you have any questions about credit counseling, next week representatives from Consumer Affairs will be here to help. They will be in our phone bank next Wednesday from 5:00-7:30pm to offer tips on credit counseling, debt consolidation and how to avoid credit trouble.

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